Buying property with girlfriend or boyfriend is like the perfect next step in your relationship. Hold on a sec though. Read this first.
Are you thinking about buying a property with your girlfriend or boyfriend?
Before you dive in, let’s have a chat about some stuff you should be aware of, especially with how home loans work here in Malaysia.
Deciding to invest in a property with your girlfriend or boyfriend may seem like a big step forward in your relationship.
However, it’s a decision that comes with several complexities, especially within the context of Malaysia’s unique home loan rules.
This article aims to shed light on some critical aspects and potential challenges of buying property with a girlfriend or boyfriend and navigating the home loan rules in Malaysia.
What’s the Deal with Home Loans in Malaysia?
Here’s the thing – in Malaysia, when you’re buying your first or second property, you’re entitled to a loan margin of 90%.
Pretty sweet deal, isn’t it?
That could really help you leapfrog into becoming a homeowner.
But here’s the catch – if you and your partner jointly apply for a home loan, you’ll both be left with just one more of these super-duper 90% loans.
Now, if one of you gets the loan alone, that leaves one person with one loan left and the other with two.
You see where I’m going with this, right?
So make sure you’ve got this figured out before you sign any dotted lines.
The Potential Messiness of Buying Property with Girlfriend or Boyfriend
Buying a property with a partner (girlfriend or boyfriend) can get messy in the case of a separation.
This potential messiness is not limited to Malaysia but applies to any part of the world. However, it can get significantly complicated when dealing with the legal and financial implications of shared property in Malaysia.
For instance, the decision to sell the property can turn into a nightmare if one party refuses to cooperate.
You decide to sell the house, but your partner just won’t cooperate.
Maybe they’re hurt, maybe they think it’s a bad financial move, who knows?
This could be due to personal emotions or simply a difference in financial perspectives.
But they won’t sign the docs, and boom!
You’re caught in a mess of legal battles and emotional turmoil.
Moreover, it’s not uncommon for one party to refuse to sign the necessary documents.
And what if one of you decides to step up, take over the house, and the loan?
If one person wishes to take over the house and the loan, there are various costs to consider.
Then you’re looking at paying legal fees, stamp duties, and other costs. Plus, the person taking over needs to apply for a new loan.
That’s quite a dent in the wallet, right?
The party intending to take over will need to apply for the cost of getting a new loan, thus escalating the financial burden.
Don’t forget, legal fees, stamp duties, and other charges can add up quickly.
Additional Complexity for Under Construction Houses
Things can get even more complicated when buying an under-construction property.
Well, brace yourself for a bumpy ride.
Until the completion of the house, you are practically unable to make any changes.
Until the house is ready, you’re stuck.
This means you can’t sell the property, transfer ownership, or settle the loan.
You are, however, obligated to continue paying for the loan interest.
And if one of you decides they can’t or won’t keep up with payments, guess who’s coming to dinner? The bank!
In case of a disagreement where one partner refuses to continue with payments, the bank will have to intervene and exercise its rights, which could lead to auctioning of the house or unfavorable outcomes.
Conclusion: Mitigating Future Complications
To avoid such complexities and potential conflict, it is advisable to buy the property and apply for the loan under your own name. This can save you from potential disputes and make property ownership a less stressful endeavor.
Furthermore, understanding the home loan rules in Malaysia can ensure you get the maximum benefit from your investment.
If you have more questions about home loans or property investments in Malaysia, always consult with us, we are your friendly online mortgage consultant.
To wrap it up, buying property with a partner can be an exciting milestone in a relationship.
However, before jumping in, consider the possible complications and intricacies of the home loan rules in Malaysia.
With careful planning and understanding, you can make an informed decision that protects your financial future.
A little bit of planning and understanding can make your property buying journey a smooth and enjoyable one.
Happy house hunting!
If you’re considering applying a home loan and have any queries, we’re here to assist.
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